1. In accordance with previous discussions, arrangements have been made for a small delegation of Canadian officials to visit Venezuela, Colombia, Ecuador, Costa Rica and Honduras for the purpose of improving trade relations with these countries. The primary object of the negotiations in each country should be to obtain for Canadian exports treatment which, though not necessarily identical with that accorded to partners in bilateral trade agreements with these countries, will be equal to that given to the United States.

2. The objective is to arrange modi vivendi with the five countries named as follows:

(a) Venezuela: the text, already agreed upon, is identical with that of the former modus vivendi that lapsed in 1949,1 and is attached as Appendix 1.^†

(b) Ecuador: the modus vivendi has lapsed² and the effort should be to renegotiate it in substantially similar terms. The proposed text is attached as Appendix 2.t

(c) Colombia: it is hoped that the trade agreement negotiated in 19413 will be ratified in due course by the Colombian Congress. While Canada and Colombia already exchange most favoured nation treatment under the terms of a treaty made between Colombia and the United Kingdom in 1866, Colombia gave notice in 1938 of intention to terminate this treaty. If and when Colombia takes this step, it would automatically bring to an end the most favoured nation arrangement between Canada and Colombia. For this reason it is proposed that the Canadian delegation should endeavour to negotiate a modus vivendi, (in terms similar to those proposed for Venezuela) which should secure the continuation of mostfavoured nation treatment, by direct agreement between Canada and Colombia, pending ratification of the more formal Trade Agreement negotiated in 1941.

(d) Costa Rica: Under the terms of an exchange of notes made in 1936 between Costa Rica and the United Kingdom,⁴ Canada is already entitled to receive mostfavoured nation treatment. Here also it is proposed that the continuation of such treatment should be based upon a direct agreement in similar terms between Costa Rica and Canada.

(e) Honduras: As Canada has not hitherto succeeded in obtaining most favoured treatment, it is proposed that a further effort should be made' to negotiate a modus vivendi of the same pattern.^'

3. The modi vivendi should be in terms substantially similar to those formerly negotiated with Venezuela and Ecuador, but there should be two slight alterations.

(a) The first alteration is required to provide for the new status of Ireland. It should stipulate that the advantage now accorded, or which may hereafter be accorded by Canada exclusively to the members of the British Commonwealth of Nations, including their dependent territories, and to the Republic of Ireland shall be excepted from the operation of this agreement.

(b) The second proposed alteration would deal with treatment of contiguous countries and possible customs unions. It should provide that the clauses of the agreement will not be applicable to advantages which might be accorded by either country to a contiguous country or to advantages which might result from a customs union in which either country might take part, it being understood that such advantages would not be enjoyed by a third country. This wording was incorporated as Article V of the Venezuelan modus vivendi in 1947 at the request of Venezuela.

4. In addition to the negotiation of a modus vivendi with each country, it is important that the delegation should endeavour to prepare the way for the future conclusion of a more formal and extensive trade agreement similar to that which is in force with Mexico. A copy of the Mexican agreement,⁶ with name of country left in blank, is attached as Appendix 3.t

5. The delegation should leave about the end of September 1950; in addition to the necessary stay in the five countries mentioned above, the delegation should have discretion to make brief courtesy calls in Mexico, Guatemala, El Salvador and Nicaragua, with all of which countries Canada now has most favoured nation agreements.

6. I therefore recommend that

(a) a delegation be authorized to undertake these duties;

(b) the delegation be given powers to negotiate modi vivendi embodying reciprocal most favoured nation treatment to run for one year (or longer until terminated) with each of the countries mentioned;

(c) the leader of the delegation be given full powers to sign each modus vivendi, provided that the terms are not less favourable to Canada than those indicated in the attached drafts; any substantial changes would be subject to prior approval by the Government of Canada;

(d) the delegation consist of

Mr. H. Leslie Brown, Dept. of Trade and Commerce (leader of delegation) Mr. H.R. Kemp, Dept. of Trade and Commerce

Mr. A. Savard, Dept. of Trade and Commerce
Dr. C.A. Annis, Dept. of Finance? ,

C.D. HOWE

¹ Voir Canada, Recueil des traités, 1948, N°. 13. C'est le modus vivendi que l'on avait trouvé au Canada, Recueil des traités, 1941, N°. 5.
See Canada, Treaty Series, 1948, No. 13. This was originally the modus vivendi found in Canada, Treaty Series, 1941, No. 5.

² Voir ibid., N°. 13./See ibid., No. 13.

³ Non retrouvé./Not located.

⁴ Non retrouvées. Selon l'Annuaire du Canada de 1950, Ottawa, Imprimeur du toi, 1951, il semble que le Canada a étendu la clause de la nation la plus favorisée au Costa Rica aux termes d'un échange de notes avec le Royaume Uni les lu et 2 mars 1933 et par décret du conseil, le 20 juillet 1935 (C.P., N° 2087).
Not located. According to Canada Yearbook, 1950, Ottawa: King's Printer, 1951, Canada appears to have extended most favoured nation treatment to Costa Rica under the terms of an exchange of notes with the United Kingdom of March 1 2, 1933 and a Canadian Order in Council of July 20, .1935 (P.C. No. 2087). s Les dossiers n'indiquent pas que la délégation a mené des négociations avec le Honduras.

There is no record that the delegation conducted negotiations with Honduras.

⁶ Voir Canada, Recueil des traités, 1946, N°. 4./See Canada, Treaty Series, 1946, No. 4.

⁷ La composition de la délégation et son mandat ont été approuvés par le décret du Conseil privé N° 4635, du 25 septembre 1950. Une description de la délégation figure dans :/The composition of the delegation and its terms of reference were approved by Order in Council P.C. 4635, September 25, 1950. A description of the delegation appears in:/Canada, Department of Trade and Commerce, Foreign Trade, Volume VIII, No. 196, September 30, 1950, p. 548.